Over the course of 50 years we have grown to become a global company that develops innovative solutions for our customers, and manages the best interests of our investors, our employees, society and other stakeholders. Read on to discover what we achieved in 2018.
The demand for smaller, faster and cheaper semiconductor chips continues to rise, driven by advancements in cloud computing, artificial intelligence, smartphones and the Internet of Things.
Our technology is the first step towards making it all possible, as our R&D investment in new materials, new products and new processes means we can help our customers develop their technology roadmap, and further extend Moore’s Law.
In 2018, this led to the introduction of the Synergis ALD tool, which leverages the core technologies from our Pulsar and EmerALD ALD products for high productivity thermal ALD applications. The new Synergis tool allows us to address more ALD applications and therefore increases our served market. Together with our other products and services, this contributed to our strong financial results, which included:
We operate in a fast-paced industry that continues to reshape the world, and our innovative technology enables the semiconductor industry to achieve advancements in computing, communications, energy, transportation, medicine and beyond.
To ensure that we can continue to make a difference to our customers, employees, and company stakeholders, in 2018 we concentrated on the following three key elements of our strategy.
In addition to our fundamental R&D efforts, we continuously expand and deepen our strategic cooperation with key customers, suppliers, chemical manufacturers, and research institutes. This approach enables us to remain innovative and swiftly meet the changing demands of our customers.
We are a key player in the deposition equipment segments for ALD and epitaxy, and a focused niche player for PECVD and vertical furnaces. As a leader in the segment, ALD has turned into a key growth driver for our business, from which we support virtually all of the leading customers in the semiconductor industry. Our newest ALD tool, Synergis, is designed to address a wide range of existing and new ALD applications, effectively increasing the market we serve.
In addition to our internal optimization programs, we are working with our suppliers to improve fundamental quality through statistical methods and process controls. In addition to addressing the technology needs of our customers, we also focus on further increasing equipment throughput and equipment reliability, thereby lowering the cost per wafer of our wafer processing systems.
In 2018, we achieved revenue growth of 11% reaching a record high revenue of €818 million, with sales increasing mainly in the logic, DRAM and analog segments. By industry segment, our 2018 revenue stream was led by memory, closely followed by the logic and foundry segments.
While our ALD product lines continued to be our key sales driver in 2018, accounting for more than half of total equipment revenue, our other product lines also contributed strongly. In our epitaxy product line we increased sales, following the strong growth we achieved in 2017, and we saw additional sales increases in PECVD and vertical furnaces.
Our industry experienced continued growth in 2018, with worldwide semiconductor industry sales increasing by around 14%. This was driven by high memory prices and broad-based electronics demand for cloud services, mobile devices, automotive and industrial applications. These drivers helped the wafer fab equipment market grow by around 10% in 2018.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
During 2018, we returned approximately €607 million to shareholders in the form of dividends, share buybacks and the capital return. This was up from €281 million in 2017 and €140 million in 2016.
Over the 2010-2018 period, we returned more than €1.6 billion to the financial markets through dividends, share buybacks, return of capital, and buyback of convertible bonds.
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In 2018, we paid a dividend of €0.80 per common share and we will propose to the forthcoming AGM to declare a dividend of €1.00 per share for 2019. The proposed 2019 dividend will mark the ninth consecutive year that we have paid a dividend.
Our shares are listed on the Euronext Amsterdam Stock Exchange (symbol: ‘ASM’) where ASMI is included in the Midcap index. In the US, our shares, held in the form of New York Registry Shares, trade on the OTC market. Details about our shares and how our shareholders are able to exercise their rights, including information on our Annual and Extraordinary General Meetings of Shareholders, voting rights, and major shareholders in the company, are outlined below.
ASMI shareholders exercise their rights through Annual and Extraordinary General Meetings of Shareholders. ASMI is required to convene an Annual General Meeting of Shareholders (AGM) in the Netherlands each year, no later than six months after the end of the Company’s financial year. Additional Extraordinary General Meetings of Shareholders may be convened at any time by the Supervisory Board or the Management Board.
The convocation date is legally set at 42 days prior to the date of the AGM.
The record date is legally set at 28 days prior to the date of the AGM. Those who are registered as shareholders at the record date are entitled to attend the meeting and to exercise other shareholder rights. Shareholders may be represented by written proxy.
The Annual Report, the Financial statements and other regulated information such as defined in the Dutch Act on Financial Supervision (Wet op het Financieel Toezicht), will solely be published in English on the Company's website (www.asm.com).
The draft minutes of the AGM are available on the Company's website no later than three months after the meeting. Shareholders may provide their comments in the subsequent three months. Thereafter, the minutes are adopted.
On May 28, 2018, ASMI held its AGM in Amsterdam, the Netherlands. The attendance rate was 69.1% of the total issued share capital of ASMI as per the registration date. In line with the ASMI Boards' recommendations, the shareholders approved all resolutions as proposed to the AGM. The minutes of the AGM are published on the Company's website.
In the AGM, each ordinary share with a nominal value of €0.04 entitles the holder to cast one vote, each financing preferred share with a nominal value of €40.00 entitles the holder to cast one thousand votes and each preferred share with a nominal value of €40.00 entitles the holder to cast one thousand votes. Presently, there are no preferred shares and financing preferred shares outstanding. Treasury shares held by the Company cannot be voted on.
Following the amendment of the articles of association on August 3, 2018, the authorized capital of the Company amounts to 82,500,000 common shares of €0.04 par value, 88,500 preferred shares of €40 par value and 6,000 financing preferred shares of €40 par value, of which 56,297,394 common shares, no preferred and no financing preferred shares were outstanding as at December 31, 2018. All per December 31, 2018 outstanding common shares were fully paid.
Financing preferred shares are designed to allow ASMI to finance equity with an instrument paying a preferred dividend, linked to EURIBOR loans and government loans, without the dilutive effects of issuing additional common shares.
The graph below provides an overview of the shareholders' structure.
Preferred and financing preferred shares are issued in registered form only and are subject to transfer restrictions. Essentially, a preferred or financing preferred shareholder must obtain the approval of the Company's Supervisory Board to transfer shares. If the approval is denied, the Supervisory Board will provide a list of acceptable prospective buyers who are willing to purchase the shares at a cash price to be fixed by consent of the Supervisory Board and seller within two months after the approval is denied. If the transfer is approved, the shareholder must complete the transfer within three months, at which time the approval expires.
Preferred shares are entitled to a cumulative preferred dividend based on the amount paid-up on such shares. Financing preferred shares are entitled to a cumulative dividend based on the par value and share premium paid on such shares.
ASMI is party to an agreement with Stichting Continuïteit ASM International (Stichting), pursuant to which the Stichting is granted an option to acquire up to a number of our preferred shares corresponding with a total par value equal to 50% of the par value of our common shares issued and outstanding at the date of the exercise of the option. Stichting is a non-membership organization organized under Dutch law. The objective of the Stichting is to serve the interests of the Company. For that objective, the Stichting may, among other things, acquire, own, and vote on preferred shares in order to maintain our independence and/or continuity and/or identity.
The members of the board of Stichting are:
The purpose of above mentioned option is to protect the independence, the continuity and the identity of ASMI against influences that are contrary to the interests of ASMI, its enterprise and the enterprises of its subsidiaries and all stakeholders.
The powers of the AGM are defined in our Articles of Association. The main powers of the shareholders are to:
Pursuant to the Dutch Financial Supervision Act (Wet op het financieel toezicht or WFT), legal entities as well as natural persons must immediately notify the Dutch Authority for the Financial Markets (AFM) when a shareholding equals or exceeds 3% of the issued capital. The AFM must be notified again when this shareholding subsequently reaches, exceeds or falls below a threshold. This can be caused by the acquisition or disposal of shares by the shareholder or because the issued capital of the issuing institution is increased or decreased. Thresholds are: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75%, and 95%. The AFM incorporates the notifications in the public register, which is available on its website. Failure to disclose the shareholding qualifies as an offense, and may result in civil penalties, including suspension.
The following table sets forth information with respect to the ownership of our common shares as of February 1, 2019, by each beneficial owner known to us of more than 3% of our common shares:
Number of Shares | Percent 1 | Number of voting rights | Percent 1 | |||||
ASM International N.V. 2 | 6,978,496 | 12.4% | – | 0.0% | ||||
Schroders Plc 3 | – | 0.0% | 3,172,577 | 5.6% | ||||
Tokyo Electron Ltd. 4 | 2,699,000 | 4.8% | 2,699,000 | 4.8% | ||||
Oppenheimer Funds, Inc. 5 | 2,017,010 | 3.6% | 2,017,010 | 3.6% | ||||
Black Creek Investment Management, Inc. 6 | 1,734,461 | 3.1% | 1,734,461 | 3.1% |
A 'beneficial owner' of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares (i) voting power which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power which includes the power to dispose, or to direct the disposition, of such security. In addition, a person shall be deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security, as defined above, within 60 days, including but not limited to any right to acquire: (i) through the exercise of any option, warrant or right; (ii) through the conversion of a security; or (iii) pursuant to the power to revoke, or pursuant to the automatic termination of, a trust, discretionary account, or similar arrangement.